Look-through earnings

Look-through earnings is a term coined by the American investor Warren Buffett, who believes it to be a better metric to determine the intrinsic value of a company.

His preference for this concept is due to the fact that it can overcome the shortcomings of general accounting.

[1] The concept of look-through earnings was first mentioned in a booklet called Berkshire Hathaway's Owners Manual first published in 1996 and updated in 1999.

In the booklet Buffett lays out the 13 principles he had mentioned at the time of the Blue Chip merger of 1983.

The principles were mainly for new shareholders to understand Berkshire Hathaway's managerial methods.